Ethereum has a monetary paradox at its core — it behaves like money, yet continues to think of itself as a commodity. This fundamental tension sits beneath many of the challenges Ethereum now faces: its governance model, its long-term sustainability, and the coherence of its narrative.

Ethereum today stands as the largest and most dynamic ecosystem in the crypto world. It is arguably the most decentralized project after Bitcoin — though decentralization itself is such a nuanced concept that, in some dimensions, Ethereum may actually surpass Bitcoin. This decentralization, while a tremendous achievement, also brings a major challenge: how to define a coherent, long-term strategy in an ecosystem with no central authority.

The Ethereum Foundation — and, to a great extent, figures like Vitalik Buterin — have managed this delicate balance with remarkable success. The Foundation’s strategic direction has served as an anchor for thousands of independent actors, aligning innovation with a shared ethos. That said, Ethereum’s evolution has leaned heavily toward technical excellence while leaving its economic identity largely undefined.

Ethereum has become a technological marvel — a living, breathing open-source project on the scale of the Internet itself — yet it still struggles to articulate its monetary purpose. The network’s developers have spent years perfecting scalability and security, but much less time discussing what ETH means as money.

For years, ETH has been described as the “new oil” of the digital economy — a narrative that framed it as the essential fuel of Web3 activity. This idea fit regulatory realities: by positioning ETH as a digital commodity rather than a financial asset, Ethereum avoided being classified as a security. It was a pragmatic move that allowed ETH to trade on the CBOE alongside Bitcoin and helped it maintain legal protection under U.S. law.

But what was once a clever legal framing has now become an economic trap. Because ETH is not oil — it is not merely consumed and burned. It is saved, staked, lent, borrowed, and used as collateral. It functions as the monetary base of the digital economy. ETH doesn’t just power activity; it denominates it.

And unlike oil, Ethereum must evolve. Oil doesn’t need developers. Gasoline doesn’t need governance. But Ethereum does. Treating ETH as a commodity implies that it can remain static, that its infrastructure can persist indefinitely without coordinated investment or maintenance. That belief is dangerously unrealistic.

If Ethereum is a digital nation, then it must sustain public goods, invest in its infrastructure, and attract top-tier talent — the digital equivalent of maintaining roads, institutions, and universities. To imagine otherwise is to build a city and expect it to thrive without upkeep.

The “oil” metaphor invites complacency. Commodities don’t innovate; they simply exist. But Ethereum cannot afford to stand still. It must continually attract the best minds in cryptography, distributed systems, and economics. Its leadership in blockchain technology depends on relentless innovation, not static perfection.

A “nation” that stops funding its research, infrastructure, and education eventually loses its competitiveness. Similarly, if Ethereum fails to reinvest in its technical and community foundations, other ecosystems will capture its momentum — not because they are better, but because they are evolving faster.

Recently, one of the most influential figures within the Ethereum Foundation departed. Though individual reasons vary, the pattern is revealing: it is difficult to retain talent in an organization whose stated mission is to dissolve itself.

The “subtraction” philosophy — the idea that the Foundation should eventually disappear — is intellectually elegant but practically self-defeating. No organization can attract or retain high-caliber talent if its ultimate goal is obsolescence.

Moreover, the Foundation’s treasury is finite and denominated in ETH, which fluctuates with market cycles. Selling ETH during bear markets reduces reserves precisely when they are most needed. As a result, the Foundation has been forced to focus on cost control at a time when the ecosystem’s growth demands the opposite: more hiring, more coordination, and more investment.

There have been proposals to allocate a small portion of network fees to a Foundation treasury, yet these have been rejected — often for admirable reasons, such as avoiding agency problems or excessive centralization. But if the alternative is underfunding the very infrastructure that sustains Ethereum, then new mechanisms must be considered.

One of the most common arguments within the community is that Ethereum’s transaction fees — its “revenues” — don’t matter, because Ethereum isn’t a company and shouldn’t be valued as one.

That’s true. Ethereum is not a corporation. Its goal is not to generate profits for shareholders.

But to claim that fees don’t matter is like claiming that taxes don’t matter for a country’s survival. Fees are not about profit; they are about sustainability. They are what fund the nation’s roads, maintain its defense, and ensure its services continue to operate.

In Ethereum’s case, fees represent economic activity and demand. They are the network’s heartbeat. When fees drop to near zero, it signals not prosperity but fragility — a network subsidizing activity without capturing any value from it, like a state offering everything for free while its treasury runs dry.

Ethereum doesn’t need to extract value like a business, but it must maintain an economic equilibrium. Otherwise, the network becomes like a nation with no tax base, forced to issue more of its currency (ETH) to cover basic needs — a recipe for long-term devaluation.

Within the Ethereum community, discussions about ETH’s price have long been taboo, often dismissed as speculative. Yet ETH’s market value directly impacts every citizen of the Ethereum economy — from developers to DeFi protocols.

Major upgrades like Dencun, which dramatically reduced demand for ETH by lowering fees, illustrate this disconnect. The change was celebrated as a technical triumph but economically it meant that the network’s “currency” lost demand overnight, devaluing the holdings of everyone who treats ETH as savings or capital.

When the Foundation and developers ignore the monetary consequences of technical decisions, they inadvertently send a message: holding ETH is a civic act, not an economically rational one. But no economy can thrive on civic virtue alone.

If ETH is to serve as the base currency of the on-chain world, its holders must be rewarded — not penalized — for supporting the system. In traditional terms, if confidence in a currency falters, central banks raise interest rates to restore value. In Ethereum, however, we’ve flirted with the opposite — negative staking yields and narratives that discourage holding. That is not monetary prudence; it’s monetary self-sabotage.

The Dencun upgrade, by drastically reducing transaction costs, also eliminated a key source of economic sustainability. Ethereum now subsidizes nearly all activity on the network. This is like a nation reducing taxes to zero to stimulate economic growth — effective in the short term, disastrous in the long run.

Ethereum’s historical data shows that even during times of high fees, demand remained strong. The network’s value proposition is not its cheapness but its neutrality, security, and credibility. A moderate fee structure that maintains these qualities is far more sustainable than an artificially low one that erodes the system’s self-sufficiency.

Lowering fees to improve scalability is admirable, but lowering them to zero destroys the very mechanisms that allow the system to maintain itself. A healthy economy doesn’t grow by eliminating its revenue — it grows by increasing its productivity and redistributing the gains.

Ethereum’s Layer 1 should not surrender this role. The base layer must evolve and remain economically viable — not become a subsidized public utility that eventually collapses under its own weight.

All these factors point toward a single reality: Ethereum has become a nation without taxes. Its citizens are active, its economy vibrant, but its government — the Foundation — is underfunded and its monetary policy remains misunderstood.

The paradox is that Ethereum’s greatest strength, its decentralization, could also become its greatest weakness if it prevents the ecosystem from developing sustainable funding and governance mechanisms. A digital nation cannot thrive without institutions capable of maintaining the public goods on which its prosperity depends.

To move forward, Ethereum must abandon the “new oil” metaphor and embrace its true role as the digital dollar — the base currency of the on-chain world.

ETH is not fuel; it is money. It is the reserve asset, the store of value, and the settlement medium for an emerging digital economy. It doesn’t just power transactions; it denominates trust.

This shift in narrative is not cosmetic — it is existential. Commodities are consumed. Currencies endure. Treating ETH as a commodity limits its potential to be the backbone of decentralized finance. Recognizing it as a currency opens the door to sustainable governance, funding, and long-term growth.

Ethereum’s paradox — a currency that thinks it’s a commodity — has worked until now, but it will not sustain the next era. Without a bold reflection on its economic model, Ethereum risks becoming like a once-thriving city that slowly decays: its infrastructure outdated, its treasury empty, its talent dispersed.

Ethereum must evolve not only as a protocol but as an economy — one capable of funding itself, rewarding participation, and maintaining its digital commons.

ETH must stop pretending to be oil.
It is the digital dollar — and the sooner we accept that, the sooner Ethereum can fulfill its true potential as the foundation of the Internet’s economy.